James Ellis became dean of the USC Marshall School of Business in April 2007. No sooner than his five-year term began, he found himself grappling with the effects of a slumping economy and a financial crisis, which have taken their toll on both fundraising and students’ job prospects. Ellis comes from an environment steeped in business leadership. His father was a bank president, while his father-in-law was chief executive of Motorola Corp. Ellis toyed with becoming a professional golfer before turning to the business world. He was an executive with Broadway Department Stores in the late 1970s and early 1980s, and then chief executive of American Porsche Design, a division of the German car company, in the late 1980s. He bought, ran and sold a number of businesses before coming to USC as a marketing professor in the mid-1990s, and he is a founding director of Professional Business Bank in Pasadena. He met with the Business Journal at his campus office to discuss his background and his philosophy of management.

Question: You came from a very business-oriented family, with your father running a bank. Did you always want to be a CEO?

Answer: Yes and no. When I was in college, I played golf competitively and I wanted to turn pro. But my father talked me out of it. He said I should go finish my education and then I could go out on the tour. Well, I went to Harvard to get my M.B.A. and I never really went back to golf.

Q: Do you regret that choice?

A: I learned never to look back. But every once in a while I look at who’s on the senior golf tour and I say, “You know, I beat some of those guys. I could be out there with them.” But going out on all those tours would have been a terrible lifestyle living out of a suitcase, traveling all the time.

Q: So you decided to go into the corporate world.

A: Yes. My father was a great role model. I enjoyed watching what he did. The life he led was fascinating. He worked really hard and he played really hard. It was something I wanted to emulate. When I got out of business school, I told him I was going to go into the banking business. He said, “No, go find your own industry.”

Q: What was that industry?

A: Retail. I approached Broadway Department Stores chain and they hired me. I was the first Harvard M.B.A. that they had hired. They told me to go figure out the business and contribute where I could. I became an assistant buyer and made a lot of merchandising decisions.

Q: Did you enjoy it?

A: I found the more I got into the business world, the more I liked it. I liked the opportunity to lead people and to make decisions and to be responsible for those decisions. I also learned important lessons on how to treat customers.

Q: Isn’t retail a cutthroat business?

A: I had to be one step ahead of both the customer and the competition. When you want to buy a blue or purple shirt, I have to make sure that I have the color you want, have it in your size and also have a tie to go with that shirt all before you walk into the store. That’s a really tough thing to do and I had to do it every day.

Q: Did you ever guess wrong?

A: Sure. You make mistakes, you buy stupid stuff that just doesn’t sell. You have to then figure out a way to get rid of it and you can’t get emotional about it.

Q: Then you went to Porsche Design; that seems like a major career switch.

A: Porsche was looking for someone to act as a merchandiser for all their accessory products. I was basically responsible for everything with the Porsche name on it except for the automobile. Sunglasses, leather goods, watches and the like. Our customers were many of the same retailers I had already been working with except now I was a seller instead of a buyer. The first sunglasses that sold for more than $100 were Porsche Design sunglasses.

Q: Sounds like a dream job. Did you get to tool around town in a Porsche?

A: Every Porsche executive is given a brand-new Porsche every year. I was given a company car, but I only had it for a day before I turned it in.

Q: Why?

A: Well, I drove the car for three blocks and passed it on to the vice president of sales. I told him I have two problems: I have a lead foot, and I have five kids and I don’t want them driving it. And you know what? That was the biggest bone of contention I had with the Porsche family, that I didn’t drive the company car. Oh! They got so upset with me. And my kids they never fail to bring it up, even today.

Q: What was the best part of working for Porsche?

A: I really got to feel my oats as an

executive. I essentially ran their North

American merchandising operations and had quite a bit of latitude. And I just had to go to Salzburg in Austria the prettiest place in the whole world six times a year for board meetings.

Q: So why did you leave?

A: Well, in the late 1980s, the company’s financial position flipped. Due to the shift in exchange rates, the entry level Porsche car went from $52,000 to $75,000 in a matter of months. The price of the products I was selling went up by similar amounts, so I suggested that the company sell them in Europe for the time being instead of America. So they said, “Great. Come over to Salzburg and run the company.” And I said I have five kids and I can’t do it. So I opted not to go. It would have been a fun place to live, but it was the wrong time for my family.

Q: How difficult was it to balance the chief executive job with family life?

A: You can work a lot of hours when the kids are sleeping or are in school. But you want to be there for the kids. Also, my wife deserves tremendous credit. At that time, she was a homemaker and she made it all work out.

Q: What did you do after Porsche?

A: I got the entrepreneurial bug and bought and sold several companies. I was part owner in a ceramic paint maker in Columbus, Ohio; a sheet metal fabricator based in Chicago; a chain of mattress stores in Southern California; and a chain of sock and hosiery stores here; and a chain of home accessory stores.

Q: How did these companies fare?

A: Some of them didn’t do too well and some of them did fine. The manufacturing businesses did OK; eventually they both sold. But with the retail businesses, it was tough. You had to close stores and lay off people, very similar to what’s going on now.

Q: Did you find it difficult to close stores?

A: Well, you’re trained to make a decision, a decision that’s right for the institution or the company. You treat the employees openly and fairly, but you do what you have to do. Obviously, it’s not a fun experience, but you have to make those decisions unemotionally.

Q: Then what happened?

A: By 1996, I was running three of these businesses. One evening, I was at a dinner of a business leadership organization. I was asked the question, “If you had a clean sheet of paper, what would you do for the next 25 years?” I replied I wanted to do four things to share my experiences in the business world with others: teach, speak, write and consult. They just said, “Well, go do it.” So, when I asked my wife about this, she said she thought it was a great idea.

Q: And

A: And so all of a sudden I was in a more open frame of mind. I was told USC had an opening for a marketing professor. I interviewed for that, got the post and also won some consulting business. I sold the three companies I had and I taught my first class at USC three days before my 50th birthday.

Q: What was the most surprising thing you learned about academia?

A: Things in academia move much more slowly. I came from the corporate world where decisions were made on the spot and as a chief executive, I got to make the decisions. This was the hardest thing for me to get used to.

Q: As dean of the Marshall School of Business, what are your main goals?

A: First, to get more of a focus on globalization. Second: more of a focus on entrepreneurship and innovation. Third: What can business do for society? And fourth: more of a focus on research.

Q: As a former chief executive, what do you make of the move to cap CEO pay?

A: What people don’t understand is the amount of angst that CEOs go through personally and how much of his or her life is given to running the company. The CEO should be compensated fairly according to the free market for running the company. To put some kind of collar on executive compensation is really grandstanding and going after votes.

Q: Do you agree with the notion that executives have lost their moral compass?

A: There are a few businesspeople who have made some bad decisions and a lot of businesspeople that made good business decisions. It’s unfortunate that we focus on the problems with the few, but that’s the nature of the beast. If you look at investment managers, everybody talks about Bernie and what a crook Bernie Madoff is. But he’s only one investment manager; there are a lot of people who have been good custodians of their clients’ money. Unfortunately, he’s given that whole industry a bad name.

Q: As dean, one of your big jobs is fundraising. How has that been impacted by the financial crisis and the recession?

A: No question it’s difficult. But there is a hugely loyal alumni group that graduated from this school. They are good at giving back, even in this environment. That said, right now, we’re more in the “building friends” mode than actual donations, meaning make contact now and get the donations later.

Q: Has corporate recruiting of students fallen off with the recession?

A: In general, yes. About 40 percent of our M.B.A. students in this year’s graduating class have job offers; only a couple of those have been rescinded. That’s generally on a par with past years. But we’ve had a number of companies cancel their visits to the campus. So for those students who don’t have job offers, they will have to lower their sights on their starting salaries and get a job to get in the game, so that when the economy does turn, they will be in full position to take advantage of it. Even now, there’s a bright light: Accounting firms are still hiring. We’re putting a lot of students into accounting.

Q: What’s the best piece of advice you’ve received?

A: My father-in-law once told me: “Get in motion and stay in motion.” He also said, “When everybody else is going left, that’s when you go right.”

Q: Has the second part always worked?

A: Sometimes yes, sometimes no. But when it doesn’t work, that’s where the “staying in motion” part comes in. You don’t dwell on it, you take the appropriate steps and move on as quickly as possible. And right now, especially. When it looks like everything is crashing around you and the tendency is to be paralyzed with fear, that’s when you’ve got to keep pushing, to get through it. It’s really hard to do this, but it’s necessary.

James Ellis

Title: Dean

Institution: USC Marshall School of Business

Born: Tacoma, Wash.; 1947

Education: Bachelor’s in business administration, University of New Mexico; M.B.A., Harvard University

Career Turning Point: Decision at 50 to turn to teaching career

Most Influential People: His father, George Ellis, president of La Jolla Bank and Trust until it was sold in 1986; father-in-law, Robert Galvin, former chief executive of Motorola Corp. Both taught him “leadership and ethics and how to manage large organizations.”

Personal: Lives in San Marino with wife Gail, a clinical psychologist; they have five children, ages 21 to 37

Hobbies: Golf, spending time with family